Russian companies and the government may raise as much as $100 billion from sales of stocks and bonds in 2010 and 2011 to shore up balance sheets, refinance debt and help plug the nation’s budget deficit, UralSib said in a report.
Companies will probably seek to sell about $55 billion in equity offerings and the government may offer up to $20 billion of foreign-currency debt, with a “similar amount” of new debt coming from corporations in the next 12 to 18 months, Chris Weafer and Leonid Slipchenko wrote in the report.
Firms are struggling to borrow abroad this year after the global financial crisis cut almost all access to refinancing. The government plans to sell foreign-currency bonds next year for the first time since 1998.
With total debts of $723 billion, including $293 billion to foreign banks, Russian firms “had planned to issue equity to cut that debt in 2008-09, but were unable to do so because of the economic crisis,” Weafer wrote. “Pressure will intensify for many to restructure their balance sheets in 2010 and 2011.”
Companies were considering about $40 billion in equity sales for last year, and with only $2 billion in new offerings and $1.2 billion in secondary placements, the backlog has been building, the report said. Major listed firms will need to refinance more than $20 billion in debt in the first half of 2010, according to UralSib calculations.
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